Numerous decisions by appointed labor board members, including a significant case in Cleveland, could hang in balance of a U.S. Supreme Court ruling this year.AP file

WASHINGTON, DC -- It created barely a ripple in Cleveland. The ruling by the National Labor Relations Board about union dues from WKYC-TV 3 news photographers and technicians just wasn’t buzz-worthy.

Yet that ruling in December, 2012, still sticks in the craw of the U.S. Chamber of Commerce and other groups that stand for corporate and employer rights. The labor board, changing 50 years of established law, said that companies must keep collecting and disbursing their workers’ union dues -- money that helps a union stay strong -- even when the union contract has expired and negotiations for a new one are unsettled.

This, say critics, is a symbol of political overreach by the labor board and its Democratic appointees, installed by President Barack Obama. And now, in a circuitous route that involves the U.S. Supreme Court, the case involving WKYC and its corporate parent, Gannett Co., is among hundreds of labor matters that potentially could be reopened.

Whether that happens depends upon how broadly the Supreme Court rules when it decides whether Obama overstepped his constitutional bounds in appointing NLRB members and bypassing a reluctant Congress. A decision is likely by summer, and the Congressional Research Service cautioned last year that the decision could “cast serious doubt upon an array of previous actions by the NLRB and its ability to function in the future.”

Even if that doesn’t happen, the Cleveland television station labor decision stands out as groundbreaking to both critics and supporters. Organized labor hailed the WKYC decision as a blow against union-busting, with a national Teamsters blog expressing the sentiment best: “Woo-hoo!” The U.S. Chamber of Commerce and its National Chamber Litigation Center, on the other hand, counted it as among the “most egregious” rulings by “one of the most aggressive and activist” labor boards in NLRB history.

“This decision about the dues checkoff was a very significant decision,” said Brian A. Powers, a prominent Washington, D.C. labor lawyer who has studied the issue in detail and spoken about it before the American Bar Association. Powers recently became general counsel to the 400,000-member International Union of Operating Engineers.

Controversial appointments

To understand how a union dispute in Cleveland arrived at the intersection of politics, business and law, it helps to start with the NLRB itself. The board is a quasi-judicial panel whose staff investigates complaints of unfair labor practices, which can be resolved by one of its administrative law judges. But the board also serves as an appeals panel if a union or employer wants to contest an administrative judge’s ruling.

Congress allowed for this process with an entire body of federal law aimed at protecting workers’ and employers’ rights, embedded in the National Labor Relations Act of 1935. The NLRB is labor law’s primary arbiter, although parties may appeal the board’s decisions to federal appeals courts.

Presidents nominate NLRB members to five-year terms, with one term expiring every year. The nominations normally require Senate confirmation -- but that, too, is one of the twists in this controversy.

Senate Democrats don’t like to confirm Republican NLRB nominees, who tend to be lawyers who once represented employers in fights against unions. Republicans don’t care to confirm Democratic NLRB nominees, who often practiced law representing unions. To attain at least a semblance of balance and get nominees through confirmation hurdles, the White House and Senate will sometimes compromise, resulting in a board with members from both parties, though usually with a tilt reflecting the political party of the president.

But it is not always easy, since the minority party in the Senate can often block confirmations by filibustering. So when Obama faced Republican opposition to a nominee in early 2010, he used an Easter recess, when the Senate was not in session to object, to appoint Mark Gaston Pearce, a Democrat. The Senate soon confirmed Pearce anyway, however, and Obama named Pearce chairman in 2011.

Subsequent nominations were tougher. Facing a determined Republican bloc and the prospect of a labor board without enough members to do its job, Obama took advantage of the chamber’s winter holiday break on Jan. 4, 2012, to recess-appoint three others: Democrats Richard Griffin Jr. and Sharon Block, and Republican Terrence Flynn. Flynn barely served seven months before resigning from the NLRB board amid a controversy from his previous job (as a top NLRB attorney). So at the time the board heard the WKYC case, the NLRB only had four members -- Democrats Pearce, Griffin and Block, and Brian Hayes, a Republican who had won Senate confirmation in June 2010.

Improperly appointed?

Whether the winter break in early 2012 qualified as a true recess, entitling the president to make appointments when the Senate is unavailable for advice and consent, is hotly debated. Senators had made sure to gavel the chamber in and out of business every three days with the expectation that it would keep Obama from acting on his own. Following the question of his authority is a logical next step: If the labor board members were appointed improperly, did they even have the legal power to fulfill their duties?

That is what the Supreme Court may settle this year, in a case challenging a February 2012 NLRB ruling. The ruling favored a Teamsters local at Noel Canning Corp., a Pepsi bottling company in Yakima, Washington, and was agreed to by Hayes, Flynn and Block -- two of whom were recess-appointed. Noel Canning and the Chamber of Commerce subsequently said that since Obama improperly placed two of them on the NLRB, the panel lacked a legal quorum -- at least three valid members -- to even decide the case. Griffin, the third appointed member, did not participate in the Noel Canning decision, but the validity of all three appointed members was called into question in the case now before the Supreme Court.

But this was just one of 318 cases that the partly appointed NLRB heard. When decisions by administrative law judges serving under that board are counted, the number of potentially questionable cases exceeds 1,300, according to the Chamber of Commerce.

One of the 318 board cases was the one concerning news photographers, editors, engineers and technicians at WKYC-TV and their union, Local 42 of the National Association of Broadcast Employees and Technicians.

The union and station had been negotiating a new contract and the station decided to stop withholding the employees’ union dues. The right to stop what is known as dues checkoff when a contract ends was well-established for the last five decades, viewed as a potential economic weapon for management to use in negotiations. It was little different from employees’ right to strike, which could create economic problems for the employer.

Together, these threats provided for a form of mutually assured destruction --a threat that, at least in theory, could push the company and the union to reach a new agreement, a point noted by the lone dissenting opinion in the WKYC case.

A need for union dues

Dues checkoffs, written into union contracts, work like this: Employees promise to pay union dues but count on the employer to deduct the money from their pay and turn it over to the union. Union dues become just another payroll deduction.

But what if a company stopped taking out the money and told the employees to write their own checks to the union? As happened at WKYC, this could result in people forgetting to pay those dues or not wanting to part with the extra cash they now saw on payday. And since unions have expenses, too, this could squeeze the the union financially.

And so the technicians’ union at WKYC complained to the NLRB, saying that by ending the dues checkoff, the station committed an unfair labor practice.

Gannett and WKYC disagreed, saying the station had every right to stop collecting dues for the union because the old contract was no longer in force.

This is when the NLRB changed everything.

Pearce, Griffin and Block, all three of them Democrats and two of them recess-appointees, wrote in their opinion that they recognized the longstanding precedent created with a 1962 case involving Bethlehem Steel -- but they thought that precedent was wrong. The board in 1962 and its successive members “never provided a coherent explanation for this rule” that allowed dues checkoff to end during negotiations, the three said. They noted that over the last 15 years, some of their predecessors and the California-based Ninth U.S. Circuit Court of Appeals had been trying to chip away at the 1962 ruling.

And so they ruled 3-to-1 that the precedent was wrong -- and that even if a contract expires, a company must continue collecting dues for the union, unless negotiations are declared to be at an impasse or a new contract takes effect that ends dues checkoff. Hayes, the Republican board member, dissented.

As for the five decades worth of rulings that had just been flipped on their head, the three members said in their opinion, “Unlike a good wine, a mistake does not get better with age.”

The business community was outraged. Unions cheered.

Yet at WKYC, this momentous decision was largely inconsequential.

That’s because the NLRB said in its ruling that it recognized the station had relied on the 50-year-old precedent. It would be unfair to change the rules on WKYC and everyone else just like that. Instead, the NLRB said it wanted its decision to only affect companies going forward. It even dismissed WKYC.

In an odd way, WKYC and Gannett had won, even though big business considered the matter a loss.

The final word?

Subsequently, the station and union reached a new agreement and are now under a new two-year contract -- one that, in another odd twist, does not include dues checkoff. Union members and others knowledgeable about the matter say it was the best deal they could get, and they hope to restore dues checkoff in the next contract. For now, it is up to each of the roughly 50 members to write a check and pay the union.

This has put financial pressure on the union, with some members in arrears and some trying unsuccessfully to decertify the union as their bargaining representative.

“We are having to continue to bill our members,” said Cathy Watkins, chief union steward at the station.

What happens next may not affect these employees, but the NLRB’s WKYC ruling might not be the final word on the broader issue. If the Supreme Court rules that Obama’s recess appointments were invalid in Noel Canning case, its ruling could put into question all the other decisions those appointees made between January 2012 and July 2013, when the White House and Senate made a deal that resulted in new labor board nominations and confirmations. The NLRB now has five confirmed members -- three Democrats and two Republicans -- and Pearce is the only previous member remaining.

“In addition to potentially restricting the Board’s authority to act in the future, the reasoning underlying Noel Canning casts doubt on the legality of every substantive action taken by the Board during the tenures of Block, Flynn, and Griffin, Jr.,” said a report by the Congressional Research Service, or CRS.

Several labor lawyers and professors noted, as did the CRS, that the court could rule narrowly to avoid the chaos that might otherwise result from multiple, repetitious challenges to all those cases.

“It would be truly radical” to reopen hundreds of cases, said Douglas Laycock, a law professor at the University of Virginia.

Something similar has, in fact, occurred before. In 2010, the Supreme Court ruled that NLRB decisions must be made by a quorum -- that is, a majority of at least three of the five board members. This had the potential to upend about 600 decisions agreed to by only two members during a period in which NLRB vacancies -- and the Senate’s refusal to confirm Obama’s new nominees -- left the board with too few members.

So what happened to all those cases?

Almost nothing, labor lawyers said.

Most of the cases were settled by unions and employers who assumed they would get similar decisions as long as Obama was nominating Democrats. They wanted to move on. The board only had to rehear about 100 of the 600 cases, several attorneys said.

“With the passage of time, cases went away,” said Robert Strassfeld, a law professor at Case Western Reserve University and co-author of a book on understanding labor law.

Jeremy Hart, a labor lawyer in the Columbus offices of Baker Hostetler, said he didn’t know of a single case that ended with a new outcome.

And that might be what happens when the Supreme Court rules in the Noel Canning case, several attorneys said.

“It is still a Democrat-dominated board, so I would think that most of these decisions would come out the same,” said Hart, who has looked at the case's ramifications.

But there is no way to know, he and attorneys caution.

The WKYC decision meantime seems to be having an effect on employers, if not on the Cleveland station itself. The decision sent a clear message: Just because a labor contract ends, that doesn’t mean a company can arbitrarily stop handling workers’ union dues.

“If I was counseling an employer, that’s what I would be telling them,” said James Plunkett, director of labor policy for the Chamber of Commerce, who doesn’t like the ruling but recognizes its legal effect.

WKYC referred questions to an attorney at Gannett, which owns 42 TV stations and 82 daily newspapers. The attorney did not return calls seeking to discuss whether Gannett, if given the chance, had any interest in reopening the case.

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